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What stocks are you betting on for 2018?
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I don’t deal with the argument, I ignore it and let them try to time the market if they want. Look long term and just buy up and down
Chief
Lots of people have excuses for not investing. They often find themselves kicking themselves in the future.
Lots of people thought the real estate market was on a bubble in 2017, and again in 2019. 2019 investors wish they could have gotten 2017 prices. 2021 investors wish they could have gotten 2019 prices.
I won’t say all markets always go up, but with a long enough time frame (typically 3 to 7 years), markets tend to trend upwards overall. Don’t invest for the short term and you should come out ok.
We bought a place in 2019 and my friend said I was a fool to buy in such a hot market. He wanted me to wait for market correction in 2020 which never happened.
The fact is we had money for downpayment and mentally prepared to invest.
So don’t time the market and just invest when you are able to financially and emotionally.
Also the key is to keep investing regularly over a period of very long time.
Chief
Asset prices are inflated because interest rates are low. Asset prices are just discounted future cash flows, and the discount rate is currently low. Eventually, the discount rate will rise, which will be a headwind to asset prices, but who knows when that’ll be?
There’s also plenty of empirical evidence that market timers substantially underperform price-independent buy and hold strategies.
Conversation Starter
The market was down 80% during the dot come bubble. Who has the stomach to keep the equity in the market during that time? It bounced back in about two years, but didn't recoup its loses in 15 years...
Chief
Same as EY1; I didn’t blink in 2000, 2007, or 2020, just kept steady and DCAed in at all those sweet low points.
I ignore everyone else and buy whatever I think is right
Conversation Starter
In 7 of the 11 drips, it took one year to recover to its previous all time high. The most extreme case is 8 years. I think the hard question is if we have the gut and confidence to stay in for that 8 years.
That means you are buying at a discount for 8 years, if you assume the market will eventually go back up
Conversation Starter
EY1: Love the way you look at it